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Posted Date: 01 Jan 2009 Posted By: Nilesh Panchal Member Level: Platinum
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2008 Association of Mutual Funds in India (AMFI) AMFI Advisor Module AMFI AMFI Model Mock Sample Test R University Question paper
1 . Ex-marks of an equity fund measures its
a. Performance
b. Risk
c. Both the above
d. None of the above
2 . In order to decide an appropriate index as benchmark for an actively traded fund, one should consider
a. Fund size and portfolio composition
b. Whether the fund is broad based or focused on specific type of securities
c. Investment objective of the fund
d. All of the above
3 . Investors can inspect the following documents
a. Trust deed
b. Agreements with various constituents
c. Memorandum and articles of association of AMC and Trustee company
d. All of the above
4 . Unit holders who do not agree with the merger of a fund’s scheme have the option to
a. Exit from the scheme if it is an open ended scheme
b. Exit from the scheme after 6 months
c. Cannot exit if the AMC does not permit such withdrawal
d. Can exit only after approval of SEBI
5 . An investor cannot plead ignorance of the procedures while investing in a mutual fund because
a. Mutual fund is a risky investment
b. Law does not permit the investor to sue the Trust
c. While applying the investors sign an agreement stating they have read and understood the terms and conditions
d. An investor is expected to be careful while investing
6 . To cover fund distribution expenses, open ended funds
a. Charge a fee from agents
b. Charge entry and exit loads from investors
c. Create a reserve
d. Sell investments
7 . To sell funds effectively, an agent need not
a. Be fully aware of the important characteristics of the scheme
b. Know his/her client's risk profile
c. Give after sales service
d. Offer large investment rebates
8 . An agent can offer and sell a fund's units at
a. Any price he chooses
b. A price determined by competition among agents
c. A price based on demand for that fund's units
d. The public offering price currently in effect
9 . The AMFI code of ethics does not cover the following prescriptions
a. Adequate disclosures should be made to the investors
b. Funds should be managed in accordance with stated investment objectives
c. Conflict of interest should be avoided in dealings with directors or employees
d. Investors should approve each investment decision
10 . Investments made by a mutual fund on behalf of investors are accounted as
a. Assets
b. Liabilities
c. Capital
d. None of the above
11 . When computing NAV of fund SEBI requires accrual of major expenses to be accounted
a. Quarterly
b. Annually
c. On a day-to-day basis
d. When actually paid
12 . Initial expenses of launching schemes should not exceed
a. 15% of amount received
b. 10% of amount raised
c. 6% of amount raised
d. 5% of the amount raised
13 . The Board of Trustees of a mutual fund:
a. Act as a protector of investor's interests
b. Directly manage the portfolio of securities
c. Do not have the right to dismiss the AMC
d. Cannot supervise and direct the working of the AMC
14 . Transfer Agents of a mutual fund are not responsible for
a. Issuing and redeeming units of the mutual fund
b. Updating investor records
c. Preparing transfer documents
d. Investing the funds in securities markets
15 . Issuing and redeeming units of a mutual fund is the role
a. The custodian
b. The transfer agent
c. The trustees
d. The bankers
16 . A change in the following key people does not materially impact the performance of the fund
a. Fund sponsors
b. Trustees of the fund
c. Fund Manager
d. Members of the AMFI Committee
17 . The entity that SEBI does not regulate is
a. Share registrars
b. Mutual funds
c. Stock exchanges
d. Non-banking finance companies
18 . The largest corpus of investable funds in India is with
a. Bank-owned mutual funds
b. Private Sector mutual funds
c. UTI
d. Insurance Companies
19 . A Self-Regulatory Organization can regulate
a. All entities in the market
b. Only it’s own members in a limited way
c. Its own members with total jurisdiction
d. No entity at all
20 . After dividend declaration, unit-holders are entitled to receive dividend within
a. One week
b. One month
c. 42 days
d. Six weeks
21 . The most important link between Mutual Fund and Investors is
a. Government
b. SEBI
c. Fund distributors
d. AMFI
22 . The legal responsibility for the accuracy of the statements made in the offer document lies with
a. SEBI
b. The AMC
c. AMFI
d. The Company Law Board
23 . Standard risk factors are not
a. Market driven
b. Common to all schemes
c. Of relevance to novice investors
d. New to a regular investor
24 . If the AMC is managing a fund for the first time, this information can be found in
a. Newspapers
b. SEBI
c. AMFI Newsletter
d. Offer document
25 . Emerging or new channel for distributors/marketing or Mutual Fund in India is
a. Insurance Companies
b. Banks
c. Qualified Mutual Fund agents
d. Direct Sales agents of respective mutual funds
26 . The biggest disadvantage of the investment in the real estate is
a. Less potential for the capital appreciation
b. High purchase price
c. Depreciation in the value as the time passes.
d. Value gets eroded due to inflation.
27 . The annual yield on RBI Relief bond is
b. 9.5% before tax
c. 8.5% before tax
d. 8.5% after tax
28 . Which of the following is not a form of equity research
a. Fundamental Analysis
b. Technical Analysis
c. Quantitative Analysis
d. Information Analysis.
29 . Distribution tax should be taken into account when computing net returns from
a. Equity fund
b. Debt fund
c. Both
d. NONE
30 . The valuation norm for non-investment grade, performing assets is done:
a. On YTM basis using the CRISIL valuation methodology
b. On YTM basis with 25% discount
c. At 25% discount to the face value.
d. At face value.
31 . What does AMFI stands for?
a. Association of Mutual Funds in India
b. Association of Market Federation of India
c. Association of Money Funds in India
d. Association of Money Federation of India
32 . Tracking error is
a. Error in calculating the NAV
b. Error in Portfolio Allocation
c. A index Funds actual Return/Loss
d. Error due to practical difficulties
33 . Unit capital of a MF scheme is Rs 20 million; the market value of the investments is Rs 55 million. The No of units are! Million. The NAV is
a. Rs 20
b. Rs 75
c. Rs 55
d. Not possible to say.
34 . The current market price of a 9% coupon bond when other bonds of similar maturities pay 11% will be
a. Above Par
b. Below par
c. At Par
d. Will be unrelated to other bonds.
35 . Which of the following portfolio is most risky?
a. 75% equity-25 % Debt
b. 40 %equity-60% debt.
c. 60%equity – 40% debt
d. 80% equity- 20% debt
36 . An investor in need of the regular income should not select
a. A bank deposit
b. A debt fund
c. An equity growth fund
d. PPF
37 . Which is a better investment option whilst selecting an equity fund?
a. Ex marks 75%, Beta-0.9, Gross dividend yield 8%
b. Ex marks 80%, Beta-0.9, Gross dividend yield 8%
c. Ex marks 90%, Beta-0.8, Gross dividend yield 9%
d. Either 1 Or 3
38 . Who appoints the Custodian?
a. Asset Management Company
b. Sponsor Company
c. SEBI
d. Board of Trustees
39 . Which of the following is true for assured return schemes
a. Name and net worth of guarantor to be given
b. Performance of past-assured return schemes to be given
c. Whether assurance in earlier scheme was met to be stated
d. All of the above
40 . An open ended fund can change its fundamental attributes by
a. Allowing investors to exit after 6 months
b. Allowing investors to exit at NAV without a load
c. With consent of 75% of investors
d. None of the above
41 . India’s Central Bank is called
a. Central Bank of India
b. Bank of India
c. Indian Bank
d. Reserve Bank of India
42 . Stock exchanges can act as regulators of
a. SEBI registered mutual funds
b. Closed ended funds listed on the exchange
c. All sectoral funds
d. All equity mutual funds
43 . Which of the following will not require financial planning
a. A 40 years old doctor with substantial savings
b. A retiree who is currently getting an income of 4,000 but would want Rs. 10,000 a month
c. An old person wanting to transfer all his wealth to his grandchildren
d. A young professional aged 26 years
44 . Which of the following represents the transition phase
a. Investor has no need for investment income
b. Investor has a long-term horizon
c. Investor cannot take risks
d. Investor’s financial goals are approaching
45 . A FII can invest in a mutual fund through its
a. Non resident external account
b. Non resident ordinary account
c. Non resident rupee account
d. RBI current account
46 . Which of the following is not a benefit from a mutual fund?
a. Investor has custody of securities where fund invests.
b. Investor is able to diversify risk.
c. Investor can save costs.
d. Investor can get professional management to manage his money.
47 . The appointment of the AMC for the mutual fund can be terminated by
a. Majority of directors of the trustees
b. 50% of the unit holders
c. 45% of the Unitholders
d. 60% of the unitholders
48 . The AMC is appointed by
a. SEBI
b. Unitholders
c. Sponsor
d. Trustee
49 . In the case of a dispute, against whom can the unit holders initiate the legal proceedings?
a. Trust
b. Trustees
c. AMC
d. None of the above
50 . Validate the statement – The investor is not obligated to read the offer document before investing in units of a scheme.
a. Completely true
b. Rarely true
c. Completely False
d. Partly false
51 . Which of the following sales practices is prescribed by regulation?
a. AMFI code of ethics
b. SEBI advertising code
c. AMFI’s code for agents
d. None of the above
52 . An Open-end fund with 10000 units outstanding had the following items in its balance sheet:,Investments at market value Rs. 100000,Other assets Rs. 20000,Current liabilities Rs. 25000,Calculate the fund’s NAV per unit.
a. Rs.9.5
b. Rs.12
c. Rs.10
d. Rs.14.5
53 . MFs in India are required by SEBI to
a. prohibit their employees from personal trading in secondary markets
b. allow all employees to trade freely in secondary markets without restrictions
c. to establish a code of conduct and allow employees to do personal trading that conforms to SEBI guidelines
d. allow employees to carry on personal trading as long as they abide by SEBI guidelines
54 . SEBI does not require the following to be included in the offer document issued by a mutual fund.
a. Details of the sponsor and the AMC
b. Description of a scheme and investment objective/strategy
c. Investors’ rights and services
d. Performance of the other mutual funds
55 . Contingent deferred sales charge (CDSC)
a. Is higher for the investors who stay invested in the scheme longer.
b. Is lower for the investors who stay invested in the scheme longer.
c. Is the same for all investor irrespective of how long they stay invested.
d. Is not allowed to be charged to the mutual fund investors in India
56 . A bond’s rating indicates its
a. Reinvestment risk
b. Default risk
c. Inflation risk
d. Interest rate risk
57 . For valuation of the traded securities, which of the following is not true?
a. The security is valued at the last quoted price
b. The security is valued on the basis of the earnings capitalization
c. Marking to market is applied
d. If the security has not been traded on the valuation date, the trading price on any previous date may be used, provided that date is not more than 30 days prior to the evaluation d
58 . The expense ratio as a measure of a fund’s performance is defined as
a. Total expenses and average net asset
b. Total expenses and total assets
c. Average expenses
d. NONE
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